UK investors’ stock bets slowed in August, Calastone says

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LONDON (Reuters) – Investors in Britain pared their bets on equities and ploughed cash into safe haven money market funds in August, data from fund network Calastone showed, after a bout of market turbulence early in the month prompted more cautious behaviour.

Net inflows into stocks fell by three quarters compared to July, shrinking to 545 million pounds ($714 million) – the lowest since November. However, this still represented a 10th straight month of inflows into equities, according to Calastone.

Global stocks were hit by heavy selling early in August on weak U.S. economic data and a surprise Bank of Japan rate hike, but later managed to recover sufficiently to ultimately post a fourth straight month of gains.

Selling from equity funds was concentrated in the first three days of the month – when UK investors pulled 206 million pounds – before quickly bouncing back and later settling into more subdued inflows, the research showed.

“Investors flinched when global markets convulsed in early August,” said Edward Glyn, head of global markets at Calastone. “Outflows turned to inflows as markets calmed and sellers melted away, but nerves have clearly been rattled.”

In a further sign of caution, investors stashed 593 million pounds in money market funds tied to interest rates in August – the highest level for a year, Calastone said.

Bond funds saw strong selling activity in August, with UK investors pulling a net 516 million pounds – the third worst month on Calastone’s record.

($1 = 0.7632 pounds)